- Legal fees surge beyond 7-year totals in just 2 years
- Cabinet directives ignored
- Ministry orders comprehensive report
The State-run Ceylon Electricity Board (CEB) is under scrutiny for its staggering expenditure on legal fees, reaching an astonishing Rs. 130 million in the years 2022 and 2023 alone, as per CEB statistics on total legal fees incurred by its legal branch.
The Sunday Morning, upon reviewing confidential internal statistics, discovered that the substantial sum spent by the CEB on legal fees in 2022 and 2023 exceeded the cumulative total legal expenditure for the preceding seven years, covering the period from 2015 to 2021.
The legal branch’s expenses during 2015-2021 amounted to approximately Rs. 126 million (Rs. 126,466,842.13). In stark contrast, the years 2022 and 2023 alone have seen the legal branch incurring a total of around Rs. 130 million (Rs. 130,457,777.89).
Specifically, in 2023, the board had allocated an unprecedented Rs. 77,243,170.25 solely for legal fees. Meanwhile, the breakdowns for 2022, 2021, and 2020 reveal expenditures of Rs. 53,214,607.89, Rs. 21,929,557.80, and Rs. 17,370,095.00, respectively.
These figures raise pertinent questions, especially in light of a directive issued by the Ministry of Power and Energy. In a letter dated 1 February 2023, referring to Cabinet Decision 23/0199/601/099 of 31 January 2023, the ministry explicitly instructed all State-Owned Enterprises (SOEs) to exclusively engage legal services from the Attorney General’s Department.
The Cabinet emphasised that lawyers from this department possessed specialised training and experience to represent SOEs in legal matters. The rationale behind this directive was to curtail high and unnecessary expenditure on private legal services.
Moreover, the directive mandated that any engagement of private lawyers must secure the agreement of the Attorney General and obtain approval from the secretaries of the Ministry of Finance, Economic Stabilisation, and National Policies and the Ministry of Justice, Prison Affairs, and Constitutional Reforms. This requires a detailed submission outlining the case and the expected legal fees.
The Cabinet decision, based on a submission made by the President himself, explicitly states that should any SOE fail to adhere to the given Cabinet decision but continue to expend Government funds on private lawyers, such legal fees should be recovered from the private funds of the responsible officer.
Despite the unequivocal directives laid out in the Cabinet decision, the Ceylon Electricity Board Engineers’ Union (CEBEU), in a letter addressed to newly-appointed Secretary of the Ministry of Power and Energy Sulakshana Jayawardena, has asserted that the CEB persists in retaining expensive private lawyers at its own discretion.
Notably, this is not limited to defence against legal actions but also extends to pursuing cases initiated by the CEB, some of which allegedly serve the personal agendas of the management, according to the letter.
The union’s letter further stated: “This flagrant disregard for the Cabinet decision results in the misappropriation of millions of tariffs in customers’ funds. We are also of the view that some members of the board are not adequately informed about the specific legal cases or the restrictions on retaining private lawyers and thus are passively and ignorantly consenting to board submissions.”
The letter highlights that many legal challenges faced by the CEB are a consequence of management blunders, including those made by members of the board due to their unprofessional and biased conduct.
However, when contacted by The Sunday Morning, Jayawardena said that the ministry had instructed CEB Chairman Nalinda Ilangakoon to submit a comprehensive report on the legal expenditure of the board.
“The board cannot retain private lawyers without the approval of the Attorney General’s Department. Therefore, I have instructed them to submit a detailed report on the legal expenses made during past years,” he added.